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We begin another trading week with our sights on more clues to our economic trajectory, as we continue to look for elements that might help convince the Fed not to raise interest rates at its next meeting, on May 2nd and 3rd, three weeks away. Among those reports we expect this week are the Consumer Price Index (CPI) Wednesday and the Producer Price Index (PPI) Thursday, with Retail Sales and Import Prices on Friday.
Of these, the CPI and PPI data are the most important for the purposes of gauging our economic health. In fact, year-over-year CPI is referred to as the “Inflation Rate,” having reported +6% a month ago, +5.5% on core CPI year over year. PPI reached +4.6% last report and +4.4% on core. In addition, we’ll see the Fed minutes from the last monetary policy meeting in mid-March when they come out Wednesday afternoon.
On top of everything else, the unofficial start to Q1 earnings season begins this week; we usually look for the week when the big banks — JPMorgan (JPM - Free Report) , Citigroup (C - Free Report) and Wells Fargo (WFC - Free Report) — report, and that day is Friday. A day before, the first of the major airlines reports: Delta (DAL - Free Report) . Even before than, on Wednesday afternoon we hear from high-end retailer LVMH (LVMUY - Free Report) , which will give us some insight on European and global discretionary spending.
We spent last Friday away from the offices in observance of Good Friday, but that morning the big Employment Situation report for March came out. Somewhat surprisingly, the numbers came in pretty much in-line with expectations. I say this because other employment data over the previous week or two were notably worse than expected, from ADP (ADP - Free Report) to readjusted Weekly Jobless Claims totals. New jobs, as reported by the U.S. government, reached 236K, with an upward revision to the previous month, from 311K to 326K. January’s totals were adjusted downward, but still north of 500K.
The Unemployment Rate ticked down to +3.5%, while Average Hourly Earnings year over year wound down to +4.2% from +4.6% in the previous report, to $33.18 per hour, on average. Labor Force Participation nudged higher to +62.6%, though still off pre-Covid levels of +63.3%. We still see 5.8 million work-aged Americans without a job, while the number of long-term unemployed is +1.1 million.
Leisure & Hospitality once again led the way with +72K new hires last month, followed by Government jobs at +47K. Professional/Business Services bounced back last month to +39K, while Healthcare reached +34K. Retail jobs, on the other hand, lost -15K positions in March — illustrative that in-store shopping still seeks traction in this economy, especially with higher price points due to inflation bringing consumers a bit of sticker shock.
In any case, we start off pre-market futures trading in the red: -133 points on the Dow at this hour, -24 points on the S&P 500, -106 on the Nasdaq. Major market indices aside from the Russell are up from this time a month ago, but market participants are going to look carefully for opportunities to rip higher; we may need more econ data — say, a weaker-than-expected CPI report, for instance — to find a new catalyst.
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Market Participants on Inflation Watch
We begin another trading week with our sights on more clues to our economic trajectory, as we continue to look for elements that might help convince the Fed not to raise interest rates at its next meeting, on May 2nd and 3rd, three weeks away. Among those reports we expect this week are the Consumer Price Index (CPI) Wednesday and the Producer Price Index (PPI) Thursday, with Retail Sales and Import Prices on Friday.
Of these, the CPI and PPI data are the most important for the purposes of gauging our economic health. In fact, year-over-year CPI is referred to as the “Inflation Rate,” having reported +6% a month ago, +5.5% on core CPI year over year. PPI reached +4.6% last report and +4.4% on core. In addition, we’ll see the Fed minutes from the last monetary policy meeting in mid-March when they come out Wednesday afternoon.
On top of everything else, the unofficial start to Q1 earnings season begins this week; we usually look for the week when the big banks — JPMorgan (JPM - Free Report) , Citigroup (C - Free Report) and Wells Fargo (WFC - Free Report) — report, and that day is Friday. A day before, the first of the major airlines reports: Delta (DAL - Free Report) . Even before than, on Wednesday afternoon we hear from high-end retailer LVMH (LVMUY - Free Report) , which will give us some insight on European and global discretionary spending.
We spent last Friday away from the offices in observance of Good Friday, but that morning the big Employment Situation report for March came out. Somewhat surprisingly, the numbers came in pretty much in-line with expectations. I say this because other employment data over the previous week or two were notably worse than expected, from ADP (ADP - Free Report) to readjusted Weekly Jobless Claims totals. New jobs, as reported by the U.S. government, reached 236K, with an upward revision to the previous month, from 311K to 326K. January’s totals were adjusted downward, but still north of 500K.
The Unemployment Rate ticked down to +3.5%, while Average Hourly Earnings year over year wound down to +4.2% from +4.6% in the previous report, to $33.18 per hour, on average. Labor Force Participation nudged higher to +62.6%, though still off pre-Covid levels of +63.3%. We still see 5.8 million work-aged Americans without a job, while the number of long-term unemployed is +1.1 million.
Leisure & Hospitality once again led the way with +72K new hires last month, followed by Government jobs at +47K. Professional/Business Services bounced back last month to +39K, while Healthcare reached +34K. Retail jobs, on the other hand, lost -15K positions in March — illustrative that in-store shopping still seeks traction in this economy, especially with higher price points due to inflation bringing consumers a bit of sticker shock.
In any case, we start off pre-market futures trading in the red: -133 points on the Dow at this hour, -24 points on the S&P 500, -106 on the Nasdaq. Major market indices aside from the Russell are up from this time a month ago, but market participants are going to look carefully for opportunities to rip higher; we may need more econ data — say, a weaker-than-expected CPI report, for instance — to find a new catalyst.